Good morning. Here’s what you need to know
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Zambian Inflation Surges to 16.5% as Power Tariffs Increased by 115%
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BOZ sues over 500 shareholders of Investrust Bank
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Zambia’s capital market remains resilient to close at K171.9 billion in September
In Local Business and Finance News
Zambia’s annual inflation rate jumped to its highest level in three years in November as the nation’s worst drought in more than a century and the kwacha’s continued weakness stoked electricity and food prices. Consumer prices rose 16.5%, compared with 15.7% in October, acting Statistician-General Sheila Mudenda told reporters Thursday in Lusaka, the capital. The kwacha has slumped 3.5% against the dollar so far this quarter as the southern African nation has been forced to increase costly food and electricity imports to deal with the shortfalls caused by the drought. Last month its energy regulator approved the state-owned power utility’s request to raise electricity prices by 115% from Nov. 1 for consumers with large power demands to pay for the imports. Its central bank this month raised its key interest rate to 14%, a seven-year high, to contain price pressures and prop up the kwacha. “The bank stands ready to take appropriate action should inflation persist above the 6%-8% target band,” Governor Denny Kalyalya said on Nov. 13. Annual inflation has been above the central bank’s target since May 2019. Non-food inflation accelerated to an annual 14.1%, from 12.2% last month. Food-price growth was 18.2% in November, the same as the prior month. Read more: Bloomberg
Zambia’s capital market has demonstrated capacity for growth, supported by a relatively stable exchange rate a factor that is beneficial to the industry. This has led to the total savings in the capital market to increase by 45.09 percent during the third quarter of 2024, closing at K171.9 billion as of September 30, 2024. Equally, market capitalisation which represented the total value of all listed shares, also saw an increase of 46.8 percent to reach K166.5 billion as of September 30, 2024. This is according to the Securities Exchange Commission (SEC) Chief Executive Officer, Phillip Chitalu when giving an update on the performance of the capital markets for the third quarter of 2024 in Lusaka at their offices. “This substantial rise in market capitalisation has largely been driven by notable share price increases among key listed companies, including Shoprite Holdings, ZCCM-IH, Puma Energy Zambia, Chilanga Cement, and Copperbelt Energy Corporation Zambia (CECZ). Read more: Zambia Monitor
The Bank of Zambia (BOZ) has sued ZCCM Investment Holdings Plc and 546 other shareholders of Investrust Bank (in liquidation), seeking court permission to serve court process outside Zambia to some of the bank’s shareholders based abroad. BOZ has cited ZCCM Investment Holdings Plc and the 546 other shareholders as respondents in the matter filed before the Lusaka High Court Principal Registry. In an affidavit in support of the ex parte summons for leave to issue service of originating summons out of time, Lyness Phiri Mambo, Director in the Prudential Supervision Department of BOZ, stated that as at April 2, 2024, it was established that Investrust Bank Plc had 547 shareholders. BOZ stated that it wished to commence proceedings to determine the share value for Investrust Bank Plc shareholders. BOZ further stated that service of the originating process outside jurisdiction was, therefore, imperative for the matter to be finally resolved between the parties. Read more: News Diggers
The Securities and Exchange Commission (SEC) has come up with an initiative to help Local Authorities boost their revenue. This is being done in partnership with the United Nations Capital Development Fund -UNCDF. The Initiative dubbed ‘the Municipal Bonds Project’ seeks to address financial challenges faced by local authorities in fostering development at their level. SEC Chief Executive Officer, Philip Chitalu announced this at a media briefing in Lusaka today. Mr. Chitalu explained that the initiative is in line with the government’s decentralisation policy as it is dedicated at mitigating debt vulnerabilities and economic challenges at local governance level. Read more: ZNBC
In International News
The OPEC+ oil alliance postponed a meeting to decide the next steps of its crude production strategy to Dec. 5, two delegate sources told CNBC. The sources did not want to be named given the sensitivity of discussions. The coalition, made up of the Organization of the Petroleum Exporting Countries and its allies, was initially scheduled to meet on Dec. 1. They will now confer virtually next week. The OPEC+ coalition is currently operating three sets of separate oil production cuts, in response to an uncertain demand outlook. Under its formal output strategy, member nations are curtailing their combined production to 39.725 million barrels per day (bpd) into next year. Eight OPEC+ members are meanwhile voluntarily reducing by 1.7 million barrels per day throughout 2025, along with a second set of 2.2 million bpd of cuts that they are currently due to begin phasing out in December. The OPEC Secretariat later in the session said that the meeting was rescheduled as several ministers of member nations will be attending the Dec. 1 Gulf Summit in Kuwait City, Kuwait. Read more: CNBC
U.S. consumer spending increased slightly more than expected in October, suggesting the economy retained much of its solid growth momentum early in the fourth quarter, but progress on lowering inflation appears to have stalled in recent months. The lack of success in bringing inflation back to the Federal Reserve’s 2% target, together with the prospect of higher tariffs on imported goods from the incoming Trump administration, could narrow the scope for interest rate cuts from the U.S. central bank next year. The Fed is still widely expected to deliver a third rate cut in December, with other data on Wednesday showing more unemployed people were experiencing long bouts of joblessness in mid-November. Minutes of the Fed’s Nov. 6-7 policy meeting published on Tuesday showed officials appeared divided over how much farther they may need to cut rates. Read more: Reuters
Toyota Motor’s global output dropped for a ninth consecutive month in October, dragged lower by big falls in production in the United States and China but the decline was mild compared to previous months. The world’s biggest automaker also logged its first rise in five months for global sales, which grew 1.4% to 903,103 vehicles, a record for the month of October. Toyota said on Thursday it produced 893,164 vehicles globally, down 0.8%. That compares with an 8% fall in September. Read more: Reuters
The International Monetary Fund (IMF) has raised concerns about Kenya’s plan to secure a loan from the United Arab Emirates (UAE). The IMF’s communications director, Julie Kozack, has advised against a Sh200 billion ($1.5 billion) loan, which Kenya hopes to secure from the UAE, noting that this could expose the East African country to foreign exchange risks. The director also pointed out that the requested sum exceeds the commercial borrowing cap Sh168 billion ($1.3 billion). “We assess Kenya to have a high risk of debt distress, any new borrowing should be considered within the context of a comprehensive fiscal strategy to reduce debt vulnerabilities, while also addressing the recent and emerging fiscal challenges,’’ Julie stated. This assessment is coming a few days after Kenya committed to securing the UAE loan in phases. National Treasury CS John Mbadi disclosed in October that negotiations are underway with the United Arab Emirates for a $1.5 billion commercial loan with a seven-year term and an interest rate of 8.25 percent. “This loan is cheaper than the Eurobond we borrowed at 10.7 percent,” Mbadi told a news conference. He was referring to a $1.5 billion dollar-denominated bond issued in February to partially buy back a piece of a maturing $2 billion Eurobond (Sh258 billion). Kenya’s National Treasury PS Chris Kiptoo disclosed to journalists that the government intends to split the cash injection in tranches to remain under the IMF’s borrowing limits with the first Sh90 billion likely in January and the remainder to be transferred to Kenyan accounts later. Read more: Business Insider
24 Exchange announced today that it has received approval from the U.S. Securities and Exchange Commission to operate 24X National Exchange as the first national securities exchange in the U.S. that allows trading of U.S. securities 23 hours each workday. The extended hour trading is subject to Equity Data Plans making changes that would facilitate overnight trading hours and 24X National Exchange making an additional rule filing with the SEC confirming the changes and the Exchange’s ability to comply with the Securities Exchange Act. 24X National Exchange will be subject to the SEC’s ongoing regulatory oversight and full range of investor protections. The new Exchange will enable retail and institutional customers anywhere in the world to trade in U.S. equities via broker-dealers who are approved members of 24X National Exchange. 24X National Exchange will be launched in two stages. A first stage will open in the second half of 2025, with the Exchange operating from 4:00AM ET to 7:00PM ET on weekdays. The second stage, which will launch once the conditions noted above are met, will offer trading in U.S. equities from 8:00PM ET on Sunday through 7:00PM ET on Friday. A one-hour operational pause will occur during each trading day to accommodate routine software upgrades and functionality testing. Read more: Yahoo Finance
Finally, Capital Markets News
In 104 trades recorded yesterday 40,481 shares were transacted resulting in a turnover of K1,224,200.03. No price changes were recorded yesterday. Trading activity was recorded in AECI, Airtel, Bata, CEC Zambia, Chilanga Cement, FARM, PUMA, Standard Chartered Bank Limited, Zambia Breweries, Zambia Reinsurance, Zambeef, ZANACO, Zambia Sugar as well as CEC Africa on the quoted tier.
The LuSE All Share Index (LASI) closed at 15,836.95 points. The market closed on a capitalization of K205,861,271,352.10 including Shoprite Holdings and K80,860,995,552.10 excluding Shoprite Holdings.
A total of 11 Govt Bond trades with a total quantity of K107,497,830 and turnover K111,960,270 were processed yesterday.
